stake in Credit Libanais
Part of last month’s sale of EFG Hermes shares
The EuroMena III fund has obtained approval to acquire around three percent of Credit Libanais, at $20 million. “It was the best deal in town for a very long time,” said Romen Mathieu, Managing Partner of the EuroMena funds. The nominal purchase price to book value (P/B) comes out to 1.07. But the bank owns a lot of real estate which, when revaluated, will render the P/B drop to below one. Bank Audi, Blom, and Byblos are all trading in the range of 0.7 to 0.85 P/B. “Growth opportunities at Credit Libanais are higher in terms of potential revenues, and especially in profits if necessary savings in operational costs are made,” said a high-placed source at the bank. EuroMena will become the second largest institutional investor in Credit Libanais, following Dar El Handassah.
Mathieu said that it took more than six months for this deal to be completed. “It had to be gently cooked, eyes and heart on it full time, with trust in the company, its management, shareholders, sector risk, regional growth perspectives, value creation, future attractiveness, and most importantly, a success for our partners,” he said.
The Egypt-based EFG Hermes had approved in March the sale of its 63.7 percent stake in Credit Libanais for a total of $492.2 million. Credit Libanais Investment Bank (CLIB) has arranged the sale of 9.41 million shares, representing 40 percent of the bank’s capital to Lebanese and Arab investors. EFG Hermes also signed an irrevocable underwriting agreement to sell the remaining 5.51 million shares it indirectly owns in the bank through CLIB, a fully-owned unit of Credit Libanais. This deal will be concluded by the end of May 2017. EuroMena II, which is from the same fund family, is a shareholder in First National Bank.
Several international investors have parts in EuroMena III, such as the European Investment Bank (EIB), the International Finance Corporation (IFC), the German Investment and Development Corporation (DEG), the French Proparco, and CDC-UK, for a combined amount of $75 million.
EuroMena is expected to announce soon the closing of the raising of capital for the new tranche of Euromena III.
Date Posted: Jun 08, 2016